4.3 Closing Calculations: Doc Stamps on Deeds & Notes, Intangible Tax & Prorations

🎯 Key Florida Real Estate Statutory Takeaways

• Doc Stamps on Deed = $0.70 per $100 (or fraction) on GROSS PURCHASE PRICE. Customarily paid by SELLER.
• Doc Stamps on Note = $0.35 per $100 (or fraction) on ALL NOTES (new and assumed). Customarily paid by BUYER.
• Intangible Tax = 2 Mills ($0.002 per dollar) on NEW MORTGAGES ONLY (never assumed). Customarily paid by BUYER.
• Real Estate Property Taxes are paid in arrears (365-day year): Seller pays buyer for pre-closing days (DEBIT SELLER, CREDIT BUYER).

Florida imposes excise taxes on real estate transfers and mortgage financing: (1) Documentary Stamp Tax on Deeds (F.S. § 201.02) is calculated at $0.70 per $100 (or fraction thereof) of the gross purchase price. (Miami-Dade County levies $0.60 on single family residential). Any fractional $100 rounds UP to the next whole $100 before dividing. Customarily paid by the seller.

(2) Documentary Stamp Tax on Promissory Notes (F.S. § 201.08) is calculated at $0.35 per $100 (or fraction thereof) of the face amount of the promissory note. This tax applies to all new notes AND assumed mortgage notes, rounding fractional hundreds up. Customarily paid by the buyer.

(3) Non-recurring Intangible Tax (F.S. § 199.133) is levied at the rate of 2 mills (0.002 per dollar, or $2.00 per $1,000) on the principal amount of NEW mortgage debt only. Intangible tax is NEVER paid on an assumed mortgage debt. Customarily paid by the buyer.

Prorations allocate ongoing income and expenses between buyer and seller at closing. In Florida, real estate taxes are assessed on January 1 and paid in arrears beginning November 1. At closing, using the statutory 365-day calendar year method, the daily tax rate is calculated (Annual Taxes ÷ 365). The number of days the seller owned the property is counted (January 1 up to closing). The seller's share is calculated (Daily Tax × Seller Days). Because the buyer will pay the full annual tax bill to the tax collector in November, the closing entry is: DEBIT SELLER, CREDIT BUYER.

⚠️ Common Pearson VUE / FREC Exam Traps

• Forgetting to round up fractional hundreds before multiplying doc stamps — $250,020 rounds UP to $250,100.
• Applying intangible tax to an assumed mortgage — intangible tax is levied strictly on NEW mortgage debt.
• Inverting property tax prorations — because taxes are paid in arrears by the buyer at year-end, the entry is Debit Seller, Credit Buyer.